What are home loan break fees?
Life can change quickly and sometimes that means ending your home loan earlier than planned. Whether you're selling, refinancing, or consolidating your repayments, it’s important to understand the potential costs involved.
At Pepper Money, we’re here to help you make informed decisions. That includes knowing what break fees are, when they apply, and what they might mean for your finances.
What are home loan break fees?
Break fees are charges that may apply if you end a fixed rate home loan before the agreed term finishes. These fees can vary significantly depending on your lender and the current interest rate environment.
If interest rates have dropped since you locked in your fixed rate, your lender may charge a fee to recover the difference.
When do break fees apply?
Break fees typically apply when:
- You refinance your loan before the fixed rate period ends.
- You repay your loan in full early.
- You sell your property and discharge the loan.
Because the calculation can be complex, it’s a good idea to ask your lender for a quote before making any decisions.
Types of fees to look out for
Here are some common terms and fees you might encounter:
Early exit fees
Also known as early termination or deferred administration fees (DAF), these may apply if you pay out your loan within a set timeframe.
Pepper Money doesn’t charge early exit fees, but other fees may still apply - so if you’re unsure it’s best to speak with a Lending Specialist.
Discharge fees
Refinancing fees
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Contributor | Dianne Wassouf, Head of Customer Solutions
Dianne joined Pepper in 2012 and is now responsible for all Customer Service and Resolutions post settlement teams across Australia and Manila. Her expertise focuses on customer solutions and assistance and has equipped her with a deep understanding of client relations and service excellence.
Read more.
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